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Reform of State firms to deepen
By Sun Min (China Daily)
Updated: 2004-06-24 08:30
China will increase the pace of institutional reform of the biggest
State-owned enterprises (SOEs) via the establishment of boards of directors and
recruitment of more senior executives.
Li Yizhong, deputy minister of the State-owned Assets Supervision and
Administration Commission (SASAC), said yesterday at a work conference that the
central SOEs should modernize their systems, enhance corporate governance and
upgrade their human resources management.
The SASAC acts on behalf of the State as the investor in the 191 central
SOEs, which are the leading enterprises in their industries. The SASAC has been
actively promoting the reform of these SOEs since its establishment last April.
Some of the central SOEs will introduce boards of directors and recruit more
senior managerial staff through open competition this year, said Li. Other SOEs
will follow at a later stage.
"The next three years will be the crucial period of the reform to build a new
State-owned assets management system and modern enterprise system," he said.
"We have to build some big enterprise groups that are really internationally
competitive."
The managers of the SOEs will shoulder more liability for the performance of
the enterprises and receive payment accordingly. Meanwhile, more incentives will
also be given to good performers.
"We will encourage more competition in the applications (for) managerial
positions in these enterprises," said Li.
In the future, all the subsidiaries of the central SOEs will recruit their
executives through open competition. Foreigners will also have more
opportunities to work in these big SOEs.
A global recruitment campaign was held last year to find seven senior
managerial staff for six central SOEs. The SASAC will soon kick off a similar
campaign to fill 23 senior positions, such as deputy general manager, in 22
central SOEs. The details are to be announced soon.
Li said that as authorities encouraged innovation in the SOEs, they would
also take firm measures to punish law-breakers, such as those caught embezzling
State assets.
By the end of 2003, the 191 central SOEs had total assets of 8.32 trillion
yuan (US$1 trillion), according to SASAC statistics.
They realized profits of 300.6 billion yuan (US$363. billion) last year, up
25 per cent year-on-year.
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